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Thursday, December 27, 2012

WASHINGTON - The next time you hear government officials insist they're doing all they can to save federal money or ensure safety, consider this: the U.S. Transportation Department has yet to complete more than 600 action items, some dating back to 2004, that were recommended by its internal watchdog to help protect taxpayers.

That eye-popping statistic is contained in a little-noticed letter that DOT Inspector General Calvin L. Scovell III sent to the House Committee on Oversight and Government Reform over the Christmas holidays.

The "open recommendations" -- as they are called in bureaucratic parlance -- are fixes identified by the inspector general to improve safety or prevent hundreds of millions of dollars of future waste, fraud and abuse that have not been fully implemented and documented, or have been outright rejected by federal agencies.

At the Transportation Department, which spends between $70 billion and $100 billion a year on highways, bridges, railroads and airports, there are lots of fixes lined up on the tarmac waiting for takeoff. And the backlog has grown by about a third since the spring of 2011 alone.

Some fixes have huge potential benefits. For instance, a recent audit identified more than $2 billion in DOT grant monies that were sitting on the books but had not been used. "These are idle funds that DOT agencies can use for other projects to improve transportation infrastructure and create jobs," Scovell's letter emphasized.

Transportation Department spokesman Bill Adams declined comment Wednesday, referring to the IG's letter that stated Transportation officials were working on some of the highest priority problems with a goal of implementing fixes in 2013.

The dynamic at the Transportation Department is being repeated all across government, even as Congress and the White House struggle to reach a deal to cut spending to avert the government from going over the "fiscal cliff" next Monday. In fact, inspectors general at various federal agencies have told Issa's committee about thousands of unresolved fixes since 2009 that could save taxpayers tens of billions of dollars over the next several years.

Congress created inspectors general at various federal agencies more than three decades ago to act as independent watchdogs to root out waste, fraud and abuse from government spending. The IGs and their staffs conduct hundreds of audits a year, acting as sirens for problems ranging from waste in the stimulus program to ethical lapses among Pentagon officials.

But as the size of federal spending has ballooned in an era of trillion-dollar annual deficits, the IGs' work hasn't always garnered the response it needs from top Cabinet agency officials, the White House or Congress.

For instance, there currently are vacancies at a half-dozen major federal agencies that don't have a Senate-confirmed inspector general, either because Congress hasn't approved or President Barack Obama hasn't nominated them. The vacancies include such big-spending agencies as the Pentagon and the Interior Department, according to the IGNet.gov Web site.

And the backlog of pending solutions is also growing at some agencies.

Wednesday, December 26, 2012

Today, Secretary Geithner sent the followingletter to Congress regarding the debt limit.

***

December 26, 2012

The Honorable Harry Reid

Majority Leader

United States Senate

Washington, DC 20510

Dear Mr. Leader:

I am writing to inform you that the statutory debt limit will be reached on December 31, 2012, and to notify you that the Treasury Department will shortly begin taking certain extraordinary measures authorized by law to temporarily postpone the date that the United States would otherwise default on its legal obligations.

These extraordinary measures, which are explained in detail in an appendix​ to this letter, can create approximately $200 billion in headroom under the debt limit. Under normal circumstances, that amount of headroom would last approximately two months. However, given the significant uncertainty that now exists with regard to unresolved tax and spending policies for 2013, it is not possible to predict the effective duration of these measures.....

Thursday, December 20, 2012

Agency officials across the government have not received budget passback documents and likely will not until the White House and Congress agree on deficit reduction steps or both parties give up and let sequestration take place. An Office of Management and Budget official confirmed in an email to Federal News Radio the administration "has held off on passbacks to agencies to determine if adjustments will be needed based on the current negotiations. No decisions have been made at this point regarding budget timing." OMB traditionally sends passback, or budget guidance, which includes both actual spending numbers and policy guidance for the current and upcoming fiscal year, right around Thanksgiving. But several long-time senior agency leaders said they can't remember a time when OMB held up the communications this long.

OMB did provide agencies with initial planning guidance in May, but nothing since departments submitted their spending requests to the White House in September.

The OMB official said they asked agencies for additional information and analysis after September to update the estimates in the Sequestration Transparency Act report. The administration is using the data to finalize calculations of the spending reductions that would be required. The request was of a technical nature. For example, OMB requested the sequestrable federal administrative expenses in otherwise exempt mandatory accounts.

CGI Federal Inc. has won a $21 million contract to transition and host the U.S. Railroad Retirement Board’s financial management systems in the CGI Momentum Community Cloud.

This award has one implementation year, one base year and nine option years, the company said.

Under the contract, GCI will convert the legacy financial management system to its community cloud, delivering end-to-end support, such as conversion, training, change management, hosting and maintenance.

Wednesday, December 12, 2012

If you’ve been on Army active duty during the past couple of years, you might want to take another look at your pay stubs. The Government Accountability Office today released a report (GAO-13-28) that detailed major problems with the Army’s $47 billion annual military payroll accounts.

The agency found that the Army “is unable to track and collect data on pay errors for active duty soldiers that occur due to over payments, under payments, data entry errors and fraud,” according to a bipartisan statement issued jointly by Sens. Tom Carper, D-Del., Tom Coburn, R-Okla., Scott Brown, R-Mass., Claire McCaskill, D-Mo., and Reps. Darrell Issa, R-Calif., Edolphus Towns, D-N.Y., and Todd Platts, R-Pa.

GAO found a lot of errors, and said many “went undetected for lengthy periods of time, including some that were not detected for up to 2 years or until the soldier left the Army.”

Friday, December 07, 2012

The Interior Department’s National Business Center has been restructured and is now the Interior Business Center, according to a Dec. 6 announcement.

Officials say the restructuring will allow the center to operate more efficiently. The shared-services provider offers business solutions to Interior and other federal agencies.

“The new, streamlined Interior Business Center focuses on delivering a core set of complementary business services in the areas of human resources, acquisition, financial management and indirect cost services,” said Rhea Suh, the department’s assistant secretary for policy, management and budget, in a statement.

Suh said Interior officials surveyed customers and employees, conducted strategic assessments, and met with focus groups to find ways to transform the center. The department is taking a phased, cost-sensitive approach to the transition.

Friday, November 30, 2012

The Homeland Security Department would be required to conduct and pass a full financial audit under a bill unanimously approved by the Senate on Wednesday.

Sens. Tom Carper (D-Del.), Scott Brown (R-Mass.) and Ron Johnson (R-Wis.) — all three high-ranking members of a Senate subcommittee on federal financial management — introduced the Department of Homeland Security Audit Requirement Target (DART) Act late last year. The DART Act requires the agency, long characterized by the Government Accountability Office as being at high-risk for waste and abuse, to reach a clean audit opinion by 2013.

"Clean, auditable financial statements can provide the roadmap we need to identify potential savings, avoid waste and fraud, and move towards a culture of thrift," Carper, the subcommittee's chairman, said in a statement. "This bill requires some very important, but straightforward steps that will ensure the Department of Homeland Security can pass a financial audit."

The agency announced earlier this month it is audit-ready and "has made an attempt to pass a full-scope audit," according to Carper, but has yet to actually do so.

The bill also requires the agency's chief financial officer to submit to Congress a plan to modernize the agency's financial systems, which will be evaluated by the comptroller general.

A companion bill was introduced in the House by Rep. Todd Platts (R-Penn.) last summer but remains stuck in committee.

Meanwhile, earlier this week, the House passed a somewhat related measure, the DHS Accountability Act, which sets up an advisory commission to making recommend improvements in the efficiency and effectiveness of DHS management.

Monday, November 26, 2012

The Air Force’s controller, Jamie Morin, admitted publicly in April that the service spent seven years and $1 billion on a logistics management system that had “negligible” capability.

But that’s not what drove Air Force leaders to finally cancel the Expeditionary Combat Support System project this month.

And it wasn’t because technical glitches forced the Air Force to repeatedly scale back expectations for the new system — from replacing 240 legacy systems, as originally planned, to just 12.

In the end, officials canceled ECSS because continuing it would have cost another $1 billion to gain a quarter of the capability it was originally supposed to have, with fielding delayed until 2020.

Johnson attributed the project’s extensive problems to an array of factors.

The project became plagued with technical glitches and delays.

The system had once been touted as revolutionizing the management of parts and equipment. The ECSS’ success was a critical component in the Defense Department’s strategy for meeting a congressional deadline for having audit-worthy books by 2017.

The ECSS was among almost a dozen “enterprise resource planning” systems undertaken by the Defense Department and the military services to modernize management of logistics, finances and other business operations. The systems are supposed to replace numerous smaller-scale legacy systems that are decades old in some cases.

But while the ECSS is the only one that has been canceled so far, a half-dozen other enterprise systems are years behind schedule and a combined $8 billion over their original budgets, the Defense Department’s inspector general said in a July report. The delays not only undercut anticipated cost savings, but also risk putting the department behind in reaching the 2017 goal to clean up its books, the IG said.

Lawmakers have already asked the Air Force for a briefing on the ECSS cancellation, according to an aide to Sen. James Inhofe, R-Okla., who is in line to become the top Republican on the Senate Armed Services Committee next year.

Friday, November 23, 2012

The federal government avoided making $47 billion in overpayments over the last three years. In addition, the governmentwide error rate dropped from a high 5.4 percent in Fiscal Year 2009 to 4.3 percent in FY2012.

Adding in the number of improper payments avoided during the same three-year period by the Department of Defense in commercial contracts, the overpayment savings rise to $70 billion and the governmentwide error rate sinks to 3.7 percent. Danny Werfel, the controller of the Office of Management and Budget, announced these figures Wednesday in a blog post on the agency's blog, OMBlog.

Werfel wrote that error rates dropped in major programs across the government, including Medicare Fee-for- Service, Medicaid, the Earned Income Tax Credit and SNAP (Food Stamps). He added the Department of Labor is also working with states to reduce Unemployment Insurance improper payments.

Wednesday, November 21, 2012

The Homeland Security Department’s decade-long struggle to integrate components and achieve clean books passed a major milestone with the release this month of DHS’ annual financial report, officials told Government Executive. For the first time, the department was given a “qualified audit opinion,” having submitted five statements of financial management for review.

The key area of improvement was auditing of general property, plant and equipment management, particularly in its Coast Guard organization, officials said.

Undersecretary for Management Rafael Borras praised DHS Chief Financial Officer Peggy Sherry for her “in-depth risk assessment of the issues,” and for working “closely with our component agencies to create mitigation plans” and for meeting “regularly with component CFOs to ensure adherence to the established milestones and remediation plans.” Other partners included DHS’ Office of the Chief Procurement Officer and the Office of the Chief Readiness Support Officer.

When the department was stood up in 2003, auditors faced 30 significant deficiency conditions, of which 18 were material weaknesses, Sherry explained, so progress required work with the Homeland Security’s Office of Inspector General, Congress, the Office of Management and Budget and GAO to implement the 2004 DHS Financial Accountability Act.

When the 2011 audit produced qualified opinions in two areas, Secretary Janet Napolitano pushed for execution of a “deeper dive” into all five statements in 2012. With billions in property for the whole department spread nationwide, Sherry added, it took major collaboration to audit them all at the same time.

“The full-scope audit opinion,” Sherry said, “is confirmation of DHS’ ongoing commitment to instituting sound financial practices to safeguard taxpayer dollars. We’ve provided reasonable assurance that internal controls over financial reporting as required by law are effective. With the exceptions of a few areas, we have good business practices in place to ensure our financial statements are accurate.”

DHS’ progress in general management reforms drew praise a year ago from Comptroller Danny Werfel, but its audit issues remain on the Government Accountability Office’s high-risk list.

Microsoft recently announced the availability of cloud-based Microsoft Dynamics business services designed to meet the security and functionality requirements of U.S. federal government agencies.

The services were designed to enable government organizations to collaborate, manage data and improve processes, while leveraging the potential flexibility and cost savings of a cloud-based delivery model hosted by Microsoft partner Layered Technologies Inc.

Intended to meet the National Institute of Standards and Technology security and control standards required of federal agencies for Federal Information Security Management Act compliance, the Layered Tech environment includes a private cloud with dedicated hardware and physical storage for the tightest security requirements, Microsoft said.

A set of Microsoft Dynamics services will be available on the new infrastructure, designed to allow government agencies to provide functions such as workforce management, task management, field inspection, intelligence gathering, call center interactions, financial management, grants management and emergency response.

Friday, November 16, 2012

Beef jerky, a microbrewery and windmills are among the hundreds of items the Defense Department is not only spending money on, but producing each year.
And Sen. Tom Coburn (R-Okla.) wants the Pentagon to cut it out. Coburn said Thursday, DoD will spend almost $68 billion on non-military goods and services over the next 10 years. Some recent examples include a smartphone app to help military members manage their caffeine intake and the sponsorship of a workshop by the Defense Advanced Research Projects Agency called the 100 Year Starship project, which included a session called, "Did Jesus die for Klingons too?"
Coburn released a new report, called The Department of Everything, in an attempt to shine light on what he calls wasteful spending during a time of ever-tightening budgets.

Coburn identified five areas that he said had nothing to do with national security yet represent a significant chunk of the annual $600 billion-plus Pentagon budget:

Non-military research and development: $6 billion.

Education, specifically on schools on military bases: $10.7 billion.

Tuition assistance that mirrors a benefit from the Veterans Affairs Department: $4.5 billion.

Grocery stores on military bases run by the DoD: $9 billion.

More than 300,000 military members performing civilian jobs and numerous general officers: $37 billion.

Coburn also said the Pentagon spent $700 million on alternative energy research that was duplicative or unnecessary.

Coburn said every area across DoD must be reviewed, analyzed and decided if it is something that is core to the military's mission.

Oracle continues to be a leading provider
of enterprise application solutions to the federal government. Cliff Godwin,
Senior Vice President for Oracle E-Business Suite Development, and John Webb,
Vice President for PeopleSoft Product Strategy, will provide a product update of
these two applications solutions. They will also discuss benefits and directions
that impact Oracle federal customers as these product solutions continue to
evolve.

The requirement for federal agencies to
translate layers of data into useful information has never been greater. The
federal budget process is one example of this requirement; when setting budgets
an agency needs to determine and justify the resources needed to deliver on
programmatic goals and objectives. A number of federal agencies have implemented
Oracle Enterprise Performance Management solutions to support the budget
formulation, execution, and analysis phases of the spending cycle. This session
will feature customers who have done just that and have achieved real value.

Crissman Nichols, Budget Analyst for the United States Census
Bureau, Budget Division, Systems and Reporting Staff Neeraj Sharma,
Infrastructure Lead, Office of Finance and Accounting, Indian Health
Service

Deriving
Benefits from Shared Services

The federal government has adopted a
“shared first” policy when it comes to implementing new financial management
systems. As a number of agencies are evaluating how to upgrade or improve
current systems they are examining how shared services can provide a positive
return on investment for their agency. This session will share solutions from
three agencies that have adopted a shared services approach and have achieved
significant gains.

Friday, November 02, 2012

Do you feel like the frog being boiled? Only four years ago, it was cool to
be in government again – but now the pot’s boiling on extra high. The heat
continues to rise with the taxpayers’ distrust of the management and stewardship
of their money; whether it’s anything from ballooning deficits to irksome
conference spending – the federal CFO community is in the thick of things. And
the view from the bunker is not pretty either, as we emerge from the turbulence
of continuing resolutions, threats of government shutdowns, whilst still toiling
away under the cloud of sequestration. And do not forget what we all did to make
the execution of the Recovery Act a success with transparency in reporting and
very little instances of fraud, waste, and abuse?

As we approach the presidential election and despite recent history and
events, there has been somewhat of a hiatus from new management initiatives –
but expect this to change quickly (no matter who wins the election) with a newly
invigorated administration, some severe externalities hanging over us, and a
backlog of legislative proposals aimed at improving how the government spends
its money. The federal CFO community will continue to experience increasing
pressure and demands to keep performing with ever eroding levels of resources. I
see that these challenges are starting to drive an emerging agenda for the
federal CFO to address and work on over the next handful of years. So, here are
four of the bigger things I see on the agenda:

Thursday, October 25, 2012

WILLIAMSBURG, Va.-- The Recovery Accountability and Transparency Board had so
much success moving Recovery.gov to the cloud, it is looking there again to give
agencies a new set of accountability tools.

Shawn Kingsberry, the board's chief information officer and assistant
director for technology, said about four agencies are testing a new suite of
data-analysis software to ensure Recovery Act funds are not being subject to
waste, fraud or abuse.

The Recovery Board is working with several agencies to test out these accountability tools in the cloud. The tools include data-
analysis software that can detect data anomalies on contracts, grants and loans
issued with stimulus funding.
Agencies submit award or proposed award data to the board. The board then
uses these tools to find potential issues with the vendor and passes that
information back to the awarding agency. The agency can then decide what steps
to take next.

Kingsberry said agencies can and should take a pause to make sure the funds
are not falling victim to waste, fraud or abuse.

The Recovery Board's experience with putting software in the cloud has been
successful. It first moved its site to the public cloud in April 2010.

Friday, October 19, 2012

The Office of Management and Budget is preparing to mandate changes to how
agencies designate both the title and the role of their chief information
officer.

Steven VanRoekel, the federal CIO, said the initiative is about giving CIOs
the ability to reach into the dark corners of the agency where IT spending
hides.

He said CIOs need "to have the authority, the seat at the table in the
Investment Review Board and then reach down and look at that. We are looking at
starting to institutionalize that. This office put out a memo about a year ago —
the first one that was issued by me on this topic — and we've been really
working hard to drive that behavior."

The hidden IT is just one example of why OMB believes CIOs need more
oversight and authority. VanRoekel said there are too many instances where the
CIO doesn't know his or her agency is spending on IT until it's basically too
late.

This would be OMB's second major modification to give CIOs more authority
over their bureaus. In August 2011, OMB issued a memo putting CIOs in charge of all commodity IT
spending across their agency.

Wednesday, October 10, 2012

Federal chief financial officers say finding efficiencies in their agency is
among their top priorities. But moving to a financial management shared service
provider or even to individual shared applications doesn't rank high on their
to-do lists.
In an exclusive Federal News Radio survey of CFOs and deputy CFOs conducted in August, 55 percent
of the respondents rated spending money more wisely as their top priority. But
at the same time, 36 percent rated moving to the Internet Payment Portal or
other financial management shared services as their fourth highest priority,
while only 9 percents ranked it as high as third overall.
Adam Goldberg, executive architect in the Office of Financial Innovation and
Transformation (OFIT), said CFOs are showing a greater interest in shared
services, but they haven't fully committed to the concept.

Federal News Radio conducted the anonymous survey to find out how CFOs and
deputy CFOs are dealing with and preparing for sequestration, budget cuts and
other challenges. We sent the survey to 58 federal budget officers and received
a 24 percent response rate. Out of those who responded, 46 percent were with a
cabinet-level agency and 39 percent were with a large agency. All respondents
said they are a career official and not a political appointee.
This is the second survey of CFOs in 2012. The first survey also showed CFOs weren't ready to move to shared
service providers either.
But now nine months later and with the release of the Office of Management and Budget's shared
services strategy, agency budget executives remain uncertain about using these
common systems.
Goldberg said CFOs are starting to come around to the idea especially as
budgets shrink and their workforce retires.

OFIT is leading an effort to develop several shared services, including
electronic invoicing, centralized receivables collections and intergovernmental
transactions.
Goldberg said there is greater interest to use these one-offs as opposed to
moving an entire financial management system to a shared service provider.
OFIT is getting ready to start a two-year pilot with the centralized receivables collections application. The program
will help agencies collect outstanding debts, which could be for a travel
expense, a fine or a penalty. Treasury hired a contractor to act as a debt
collector, who would take over the billing, the notices and the follow ups that
need to take place.

Goldberg said agencies could save $300 million-to-$350 million annually when
it is fully scaled across the government.

In addition the debt collection initiative, OFIT's e-invoicing program could save the government millions.
Goldberg said at full capacity, agencies could save between $400
million-and-$450 million a year.

A group of financial experts is working to make federal spending more
understandable and transparent to the public. The Office of Federal Financial
Management and the Chief Financial Officers Council has moved the idea of a
Statement of Spending to the front burner.

Monday, September 17, 2012

Invoking a Washington Redskins football metaphor, Pentagon Comptroller Robert Hale said the Defense Department is at “midfield” in its effort to meet deadlines for auditability of its financial statements, “but we’ve just got Robert Griffin III, and we’ve got the ball and we’ve got momentum,” he told a House panel Friday.

The department and all the military services are struggling to meet a congressional requirement for clean books by 2017, along with a tighter deadline of 2014 laid down by Defense Secretary Leon Panetta. At a hearing before the House Armed Services Oversight and Investigations Subcommittee, Chairman Rob Wittman, R-Va., asked five top officials for progress reports on the efforts of a department with, he noted, $700 billion in net operating costs and $12 trillion in assets.

Hale said he was “reasonably confident” of meeting the twin goals, but added he could make no guarantees. “We’ve been humbled by what’s coming in the next two years, and we’ve overpromised and underdelivered before,” he said. But Congress, he added pointedly, has “sapped some of the time we have for achieving readiness” with its continuing budget stalemate, which has required Hale and his team to execute “four shutdown drills and plan for things that don’t end up happening.”

Asked whether he favored the Audit the Pentagon Act sponsored by Sen. Tom Coburn, R-Okla., which, among other provisions, would threaten to move Defense auditing functions to the Treasury Department, Hale said he did not. “It would have the opposite effect than intended,” he said, saying Defense employees need such day-to-day operations in-house.

Hale and other witnesses noted that sections of each of the services have achieved audit readinesses, mentioning the Defense Information Systems Agency, the Defense Contract Audit Agency, the Army Corps of Engineers and several specific programs. The Marines are viewed as a model in the effort.
Charles S. Clark, GovExec.comREAD MORE..

Wednesday, August 01, 2012

CFO Charting a Course through Stormy Seas: The Chief Financial Officer in 2012

Federal CFOs are weathering today’s financial storms by nurturing and protecting their workforce. Their offices have a strong culture that is instrumental in meeting the established goals.

With staff cutbacks driving up workload for the remaining staff, continuing pay freezes driving down morale, and elections making the entire federal workforce fair game for political attacks, CFOs are in need of a strong culture to keep everyone focused on achieving results. These are just some of the findings from the 2012 survey of federal CFOs conducted by the Association of Government Accountants and Grant Thornton LLP.

The 17th annual survey is based on responses from over 300 federal CFOs and their workforces. Among other insights, we have found that:

The federal Campaign to Cut Waste does not strategically advance the mission of agencies, which sometimes results in diverting resources that could be better used elsewhere.

CFOs organize and align their offices with their agency mission such that every CFO’s success is an agency success.

The agency workforce is not as optimistic as the CFOs about how well they will weather the financial storms.

Thursday, July 26, 2012

ALEXANDRIA, Va. (Army News Service, July 24, 2012) -- During a time of increased scrutiny of government spending, the General Fund Enterprise Business System (GFEBS) steps forward to transform the way Army manages its finance and real property accounting.

On July 1, GFEBS completed the final Wave for Full Deployment and supporting over 50,000 customers world-wide to facilitate the management of nearly $140 billion in the General Fund, and an additional $80 billion in Overseas Contingency Operations funds.

Previously, the U.S. Army's finances were tracked by multiple systems that were increasingly inefficient, costly and outdated, some more than 30 years old. In an effort to gain visibility over finances and inventories, many Army commands established their own methods and internal systems. These antiquated and fragmented systems impacted military leaders' ability to make informed decisions because there was no clear picture of full resources. This ultimately affected the Soldier.

GFEBS transformed this approach. The GFEBS solution will subsume 107 legacy systems into an enterprise-wide system integrating financial, real property, cost management and performance data. Leaders have visibility through GFEBS to data that has never been available through a single access point, taking into account the true costs of operations, functions, and organizations when making budgeting decisions in support of war fighting capabilities. GFEBS allows leadership to make smarter, faster decisions, ranging from provisioning troops in the midst of battle to budget planning.

In the last three years, GFEBS grew from one million transactions and $1.2 billion in obligations in fiscal year 2009 to 20 million transactions and $30.8 billion in obligations in fiscal year 2011. GFEBS currently processes approximately one million transactions a day and $140 billion of the general fund annually.

Thursday, July 19, 2012

AGA Research Report Addresses Root Causes of a Material-Weakness Cited in the Audit of the U.S. Department of the Treasury's Process for Compiling the Consolidated Financial Statements of the U.S. GovernmentResearch team offers short-term and long-term recommendations to help the U.S. government achieve a "clean" audit opinion

ALEXANDRIA, Va., Jul 18, 2012 (BUSINESS WIRE) -- Over the past 15 years, the U.S. Department of the Treasury (Treasury), in cooperation with the Office of Management and Budget (OMB), has issued the annual Financial Report of the U.S. Government (FR), presenting the financial position and condition of the nation. For each of those years, the U.S. Government Accountability Office (GAO) has issued a disclaimer of audit opinion on the Consolidated Financial Statements (CFS) of the federal government, which is included in the FR.

The Association of Government Accountants (AGA) undertook an independent research study to develop recommendations and a plan of action to address a GAO-cited material weakness that contributes to GAO's disclaimer of opinion on the federal government CFS. Specifically, this long-standing, unresolved issue pertains to the identified weaknesses in the current reconciliation and compilation processes Treasury employs to consolidate some 150 federal agencies' financial data into the CFS.

Lawmakers should not pass new legislation that could upend the administration’s progress on making government spending more transparent, said Danny Werfel, controller at the Office of Management and Budget. Werfel told a Senate committee that lawmakers need to seriously think about the impact of new statutes on ongoing efforts to improve government accounting and tracking its money.

The administration has been implementing new laws, such as the Improper Payment Elimination and Recovery Act and another law that updates the Government Performance and Results Act, called the GPRA Modernization Act.

As Congress considers new transparency measures, Werfel offered a key question for senators to ask themselves when considering proposed legislation: Would the new law reinforce current objectives, or would it move the government in different directions?

Nevertheless, transparency legislation is moving through Congress. In April, the House passed by voice vote its Digital Accountability and Transparency Act, or the DATA Act (H.R. 2146). The bill would create the Federal Accountability and Spending Transparency Commission, which is to succeed the board that oversaw spending reports for the 2009 economic stimulus law. In addition, agencies would be required to submit their spending data to a new platform with consistent electronic identifiers and markup language.

Tuesday, July 17, 2012

The Defense Department could miss deadlines for improving its financial audits because of delays in six modernization projects affecting financial management, logistics and other areas, the agency’s inspector general said in a report released Monday.

Those projects — known as enterprise resource planning systems — have collectively experienced $8 billion in cost overruns and schedule delays of a year-and-a-half or more in development and implementation, the report said (PDF).

Besides cutting into hoped-for cost savings, the delays increase the odds that the Pentagon will not meet a statutory September 2017 target for passing a full financial audit. Defense Secretary Leon Panetta’s 2014 goal of successfully completing a budget audit — one of four steps involved in meeting the full audit-readiness goal — is also at growing risk, the report said.

Monday, July 16, 2012

Management problems at the Homeland Security Department threaten to undermine efforts to prevent terrorism in the U.S., lawmakers and experts with close knowledge of the department's operations said Thursday.

The department has played a key role in stopping all large-scale attacks since 9/11, but it still faces significant integration challenges, said Sen. Susan Collins (R-Maine) at a Thursday hearing by the Homeland Security and Governmental Affairs Committee.

She said DHS' continued presence — since its creation — on the Government Accountability Office's High Risk List as evidence.

DHS opened its doors in 2003, consolidating responsibilities from 22 other departments and agencies. The goal of Congress in creating DHS was to eliminate stovepipes that made it difficult for agencies to share information and resources aimed at preventing terrorism.

But nine years later, DHS has failed to adequately support key mission areas, said former department Inspector General Richard Skinner.

Skinner said DHS is lagging especially in the areas of financial management, acquisition management, IT management and grants management-most of which GAO has included on its high risk list.

Wednesday, July 11, 2012

Agencies are conducting a series of pilot programs to improve the oversight and processing of grants, contracts, loans and other spending data.

The test programs are part of how the Government Accountability and Transparency (GAT) Board is implementing three broad-based recommendations.

President Barack Obama created the GAT Board in June 2011 in an executive order. Just last week, the President announced Richard Ginman, the director of Defense Department procurement policy, will be the chairman of the board. In that role, he replaced Earl Devaney, who retired on Dec. 31.

"[T] he GATB has been working closely with the Recovery Accountability and Transparency Board, which established a new benchmark for how we should collect, display and oversee federal spending data under the Recovery Act through Recovery.gov and its innovative Recovery Operations Center," wrote Danny Werfel, the Office of Management and Budget's controller, in a blog post Monday. "Together with the Recovery Board, federal agencies, OMB and others, the GATB is a critical driver of continued progress in our forthcoming efforts to make federal spending data more complete, more transparent, and more reliable."

The board made three recommendations to Obama in December, and since then have been implementing each one of them on a pilot basis.

Data mining by private companies could save the government billions if a proposed government transparency act is made law, according to presentations at a forum in Washington on Tuesday.

The vendors, including Microsoft, Teradata of Dayton, Ohio, SAP, the German software giant and MarkLogic of McLean, showed the types of data that they said could be mined from accurate and comprehensive records if the Senate passes the Digital Accountability and Transparency Act.

The act, proposed by Rep. Darrell Issa (R-Calif.), and passed by the House in April and now pending in the Senate would establish an independent board that would track all federal spending. The board would maintain a Web site similar to usaspending.gov, which the Sunlight Foundation says shows $1.3 trillion in spending discrepancies.

Issa and Senate co-sponsor Mark Warner (D-Va.) say the bill could prevent the waste and abuse of federal money.

Friday, July 06, 2012

The White House is using a restaurant-style rating system for the 2012 SAVE Award contest, and it wants agency chief financial officers to be the food critics.

The administration is asking federal employees to rank money-saving ideas with one, two or three stars — with three being the top-rated, most likely to save the government money.

"In addition to reviewing and rating each SAVE Award submission, CFOs should pay particular attention to those submissions that their agency ranks most favorably," wrote Danny Werfel, the controller of the Office of Management and Budget, in a June 27 memo to CFOs. "The MAX Community site will include a check-box to indicate that the 'Idea is Recommended' by the agency. Agencies should provide this designation to the best candidates for consideration of the SAVE Award. This designation should be limited to between five and 10 ideas per agency, depending on the size of the agency and the number of submissions. Before an agency indicates that a particular idea is recommended by checking this box, the CFO must confirm with internal agency programmatic, operations, communications and other stakeholders, as well as agency leadership, that all parties are comfortable with moving forward with the idea should it ultimately be selected as a finalist for the SAVE Award."

The administration will kick off the 2012 SAVE Award contest in a few weeks and provide agencies with a list of ideas in the next two months, Werfel said.

"To avoid repeating ideas, to the degree practical, agencies are encouraged to review recommended SAVE award submissions from prior years to determine whether analysis has already been done about the validity and merits of a particular idea," Werfel wrote. "These ratings and recommendations will serve as the starting point for a deliberative process to determine which submissions may be considered as finalists for the SAVE Award. Following submission of agency ratings of SAVE Award candidates, OMB staff will review the submissions and engage further with agencies as appropriate."

The 2012 guidance is different than the 2011 memo. Werfel is asking CFOs to work more closely with the program areas before finalizing their list of money saving ideas.

Wednesday, June 13, 2012

The DATA Act, the government spending transparency bill that passed the House in April, has ruffled some feathers at the Office of Management and Budget, signs of which were on display Tuesday at a panel discussion of lessons learned from implementation of the 2009 Recovery Act.

Controller Danny Werfel, addressing a workshop put on by the nonprofit Partnership for Public Service and sponsored by Grant Thornton LLP, clashed with Obama administration colleague Earl Devaney, recently retired as chairman of the Recovery Accountability and Transparency Board, over whether new legislation is needed to advance their shared goals of improving transparency and accountability in agency spending.

The legislation known as the DATA Act (H.R. 2146), which is pending in the Senate, would impose a universal reporting requirement for recipients of federal grants, loans and contracts. It would require all agencies to use the same formats to publicly share their internal and external obligations and expenditures. A five-member Federal Accountability and Spending Transparency Commission would oversee the measure’s implementation.

Its components were heavily influenced by the online reporting and data consistency tools the Recovery Board pioneered during the financial crisis, and Devaney calls himself the DATA Act’s biggest fan.

The White House on Thursday announced new progress in the Obama administration’s effort to save money by consolidating and selling off unneeded federal real estate.

Through the first quarter of fiscal 2012, agencies saved $5.6 billion in property costs and were “on track” to exceed President Obama’s goal of saving $8 billion by year’s end, Controller Danny Werfel said in a blog post.

Congress is mulling bills to reform the property sale process. The Office of Management and Budget has proposed legislation to create an outside board of property experts who would bundle properties for sale after congressional approval, much like the Defense Department’s Base Closure and Realignment Commission. A bill with some similar provisions introduced by Rep. Jeff Denham, R-Calif., cleared the House in February but is stalled in the Senate.

Thursday, May 31, 2012

The Pentagon is trying to balance national security with a tough financial reality. The American Society of Military Comptrollers says the Defense Department is doing a good job putting its financial management on a path to success.

Thursday, May 24, 2012

The Treasury Department's Financial Management Service will have no trouble moving commodity technology to a shared service provider as required by the Office of Management and Budget.

FMS completed its transition to the Bureau of Public Debt for network operations and IT infrastructure support about 18 months ago under its Fiscal IT program. And that was just the latest technology service to be brought under the control of another organization.

"Both BPD and FMS work for the fiscal assistant secretary. In the conversation with him, he asked the question would it be ‘profitable'--save us time, money and energy--to look at combining the two bureau's IT infrastructure?" said John Kopec, the FMS chief information officer. "Both organizations have pretty strong CIO organizations. The BPD organization has a lot of scale in providing shared service infrastructure. Some of our applications prior to consolidation already resided at BPD."

Kopec said after looking at the potential savings and efficiency gains, the decision to move forward was pretty easy.

FMS, meanwhile, provides the oversight and governance, such as project management, capital planning and investment control and security, back to BPD.

As agency deadlines begin to ramp up over the next three months, OMB is beginning to clarify industry's role.

Unlike the former LOB initiatives where public and private sector providers existed, OMB is not differentiating between the two, said Scott Bernard, the federal chief architect at OMB.

Bernard said the strategy breaks down the roles in a shared service set up: the managing partner, the consumer or agency and the supplier.

Agencies have until the end of May to submit to OMB a high level portfolio survey of their internal lines of business, where they can identify potential opportunities for consolidation to a shared service provider.

Then by June 15, agencies must send to OMB a list of commodity IT areas ripe for consolidation and by June 29 a draft plan to consolidate commodity IT.

Wednesday, May 16, 2012

Leaders of the Senate Homeland Security and Governmental Affairs Committee Thursday asked the General Services Administration to provide details about its financial management and internal controls aimed at preventing waste, fraud and abuse, in the wake of a scathing inspector general report about GSA's 2010 Western Regions Conference (WRC) held near Las Vegas.

Chairman Joe Lieberman (I-Conn.) and Ranking Member Susan Collins (R-Maine), whose committee is tasked with overseeing agency efficiency and effectiveness, requested the information in a nine-page letter, released to the public Monday and filled with questions about conference spending, travel, awards and contracting. They addressed the letter to Acting GSA Administrator Dan Tangherlini.

Tuesday, May 15, 2012

One of the Federal government’s most fundamental responsibilities is to serve as a careful steward of taxpayer dollars – to make sure that every dollar is well-spent and directed toward areas of high return. That’s a responsibility this Administration takes seriously. From his first days in office, President Obama has led a concerted and aggressive effort to streamline government and cut wasteful and inefficient spending wherever it exists so that we can focus our resources on serving the American people. From slowing the uncontrolled growth of Federal contracting to getting rid of excess real estate held by agencies and reining in spending on Federal employee travel, this Administration has already cut billions in inefficient spending across the Federal government.

Today, we’re taking another important step forward in that effort. This afternoon, the Office of Management and Budget is issuing guidance to Federal agencies to take additional actions to increase efficiency and strengthen accountability in the areas of travel, conferences, real estate, and fleet management.

Friday, May 04, 2012

Agencies have until Aug. 31 to submit plans showing how they will consolidate and share human resources and email systems, help desk support and other information technology services.

Agencies must begin to share at least two Office of Management and Budget-approved services by December, OMB announced Wednesday in a final version of the Federal IT Shared Services Strategy. And they must update those plans annually with details about ongoing consolidation efforts and their inventories of IT assets, including systems and services.

By October, OMB will launch and maintain an online IT services catalog of services and contracts that agencies can share governmentwide.

Tuesday, April 24, 2012

Hard to believe, but the State Department’s Office of Inspector General has been without a permanent head for more than four years.

That fact, highlighted this week by the Project on Government Oversight, puts the office in an unlucky class of four IG agencies that have had vacancies at the top for at least 1,000 days.

The others are the Interior and Labor departments and the Corporation for National and Community Service. While the Obama administration last fall nominated attorney Deborah Jeffrey for the inspector general’s job at the national service corporation, the Senate has yet to confirm her.

But the White House has named no one for the top positions at the other three offices. Although there are undoubtedly plenty of competent career folks to carry on in the meantime, ‘”a permanent IG has the ability to set a long-term strategic plan, . . . including setting investigative and audit priorities,” POGO said on its web site, adding that the administration has “no good excuse” for failing to nominate someone for a post that has been vacant for years.

This memorandum directs each agency to develop the agency's plan for using the Do Not Pay solution for pre-payment eligibility reviews. As outlined [within], each agency shall submit a draft of its plan to the Office of Management and Budget (OMB) by no later than June 30, 2012.

The Government's Long-Term Fiscal Challenge: Implications for Federal Agencies by Gene L. Dodaro, Comptroller General of the United States before the 9th Annual Department of Homeland Security Office of the Chief Financial Officer Symposium in Washington, DC.
GAO-12-617CG, March 14.

So much has changed over the past 30 years. The Cold War has given way to a globalized, interdependent world. Landlines turned into smartphones. The Internet is no longer a research tool for a few. In response, companies have re-engineered themselves for this new digital information era, and governors have redesigned and modernized their states’ governments.

While change surrounds us, however, the federal government has stayed stuck in the past...

It is in the national interest to approve the president’s consolidation authority, so that we can bring Washington into the 21st century by making it tech savvy and agile, a true partner for U.S. companies, small and large, that will be the source of jobs for years to come.

We have a chance to rethink, reform and remake government in ways that will save taxpayers’ money and help us better meet the challenges of our time. In the weeks ahead, we hope that both parties in Congress can come together to seize this chance.

Thursday, March 22, 2012

The Government Accountability Office will release a report this morning detailing problems with the Army's payroll system — challenges that threaten the Defense Department's ability to be audit-ready.

GAO found the Army could not identify a "complete population of Army payroll accounts" for fiscal 2010, said Asif Khan, director of financial management and assurance at GAO, in his written testimony,

It took the Army three months to provide a list of servicemembers who receive active-duty Army military pay, Khan said.

DoD also could not locate supporting documentation for some of its pay accounts, according to the GAO testimony.

Active Army military payroll was $46.1 billion for fiscal 2010 and therefore "significant to DoD's audit readiness goals," Khan said.

Congress has told the Pentagon it must reach full auditability of its consolidated financial statements by the end of 2017. Last fall, Defense Secretary Leon Panetta ordered the department to have its budgetary resources, one part of the overall audit, ready by 2014.

The audit agency also said OMB approved 17 projects, partially approved six, shut down one and still is reviewing seven others. Of those approved or partially approved, OMB said 20 were considered low or moderate risk projects.

GAO found five agencies said the cost of their projects increased and four said their programs decreased because of OMB's reviews. Seven agencies were unsure of the effect of the pause.

Additionally, six agencies said the pause increased the time it would take to complete implementing the new system, while three said it decreased their time and four were unsure.

Auditors also reported another agency said OMB postponed its modernization efforts for three of its components, and this action increased the cost of achieving unified modernization across the agency and requires additional investments to maintain existing legacy systems for a longer period of time.

GAO also said OMB needs to finalize the revision of A-127. The White House issued a draft revision to agencies in October 2010, but as of October 2011, it did not say when the updated circular would be completed.

Monday, March 05, 2012

The Federal Emergency Management Agency will be the first Homeland Security Department component to undertake a less-ambitious financial system modernization effort following the collapse of a departmentwide effort known as Transformation and Systems Consolidation.

DHS canceled TASC in May 2011 after the Government Accountability Office ruled that DHS improperly gave CACI of Arlington, Va. a $450 million contract to implement the enterprise resource planning system. Cancellation of TASC marked the second time that a DHS attempt at an enterprisewide ERP for financial management purposes has failed; a previous effort, called eMerge2, ended in 2006.

DHS plans for FEMA to migrate its financial systems to a federal shared service provider at the start of fiscal 2015, according to GAO testimony (.pdf) presented March 1 before the House Homeland Security subcommittee on oversight, investigations and management.

Friday, March 02, 2012

The Federal Government Faces Continuing Financial Management and Long-Term Fiscal Challenges, by Comptroller General Gene L. Dodaro, before the House Committee on Oversight And Government Reform: Government Organization, Efficiency And Financial Management Subcommittee.
GAO-12-444T, March 1.

Thursday, March 01, 2012

Consistent with the Administration’s commitment to increasing the effectiveness and efficiency of Federal programs, the reform effort seeks to strengthen the oversight of Federal grant dollars by aligning existing administrative requirements to better address ongoing and emerging risks to program outcomes and integrity. The reform effort further seeks to increase efficiency and effectiveness of grant programs by eliminating unnecessary and duplicative requirements. Through close and sustained collaboration with Federal and non-Federal partners, OMB has developed a series of reform ideas that would standardize information collections across agencies, adopt a risk-based model for Single Audits, and provide new administrative approaches for determining and monitoring the allocation of Federal funds.

This advance notice outlines the reform ideas for which OMB seeks public comment. These comments will assist OMB in its development in the coming months of a further Federal Register notice, to be published for comment later this year, which would propose specific revisions to existing requirements. These reform ideas relate to, and could result in proposed revisions to the following governmentwide issuances: OMB Circulars A-21, A-87, A-110, and A-122 (which have been placed in 2 C.F.R. Parts 220, 225, 215, and 230); Circulars A-89, A-102, and A-133; the guidance in Circular A-50 on Single Audit Act follow-up; and the Cost Principles for Hospitals at 45 C.F.R. Part 74, Appendix E.

Wednesday, February 29, 2012

The federal government is doing a poor job of coordinating its responsibilities in dozens of areas, including food safety, breast cancer research, assistance to small business owners and home buyers and background investigations for federal job applicants — a disorganization that could be costing taxpayers tens of billions of dollars annually, according to a new report (GAO-12-342SP).

The 428-page study by the Government Accountability Office details several significant cases of duplication, overlap or lack of coordination between agencies and programs.

Since last year’s report, the GAO said the Obama administration has addressed 110 of the 145 actions it proposed could be taken by the White House and federal agencies. Congress has addressed 12 of the 31 steps it proposed lawmakers could take, GAO said.

About the FedCFO Publisher

Since 1994, Doug Davidson has delivered Information Technology consulting to both public and private sector clients. He is a United States citizen and a certified Project Management Professional (PMP) who's experience with federal administrative and financial management systems is in the areas of implementation, integration, operations and maintenance, federal accounting, reporting, budgeting, data extraction, data conversion, data transformation, and information synthesization.
Learn more at:
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